4M Market Coupling • The Project • Future projects • Bucuresti, 21/10/2014 AGENDA I. Czech-Slovak-Hungarian-Romanian Common Parts 1. Market Coupling Theory and Practice 2. Project road 3. Operational overview II. Further Information on Regional Markets Page 2 Market Coupling Theory 1/2 Market Coupling (MC) = Implicit Auction: optimal allocation of energy and crossborder transmission capacity rights in one common process. All inputs (bids and capacity data) are taken into account together. Method: almost the same as local matching of bids but using cross-border profiles as constraint of trade between market areas. Energy, maximised by cross-border capacity, flows from low price area to high price area in order to try to balance the market prices. SELLERS High Price Area Capacity Constraint Low Price Area 50Hz BUYERS Page 3 Market Coupling Theory 2/2 In case of price difference between two neighbouring areas, congested border in the direction of the high price area. In case of equal prices of two neighbouring areas, transmission capacity was enough for the market. Price difference (spread) between neighbouring market areas’ prices = Capacity auction price multiplied by = cross-border flow Capacity auction price TSOs’ Congestion Revenue Implementation of MC requires close TSO-PX cooperation and NATIONAL REGULATORY AGENCY support. Operation of MC is daily common process operated by the involved TSOs and PXs. Page 4 Market Coupling in Practice Theoretically Proved Optimal Day-Ahead Trading Form Several Implementation Project on voluntary basis Flow-Based MC defined as day-ahead Target Model Elaboration of harmonized EU legal background Implementation of European Price Coupling as soon as possible and involving at least all EU Member States Page 5 Project road 30 May 2011 11 Sept 2012 Meanwhile July 2013 August 2013 Memorandum of Understanding among CZ, SK, HU Parties Launch of CZ-SK-HU Market Coupling Romanian and Polish Letter of Intent on participating Memorandum of Understanding among 5M (CZ-SK-HU+RO+PL) Parties Decision on starting 4M MC Project with the goal to implement CZ-SK-HU+RO MC; Polish parties in observer status Tomorrow Launch of 4M Market Coupling Near Future Further steps towards the European Price Coupling (Target Model) via CEE project to join Multi-Regional Coupling Page 6 4M Market Coupling Project • Day-ahead ATC based price coupling covering Czech-Slovak-Hungarian+Romanian market areas • Members: CZ-SK-HU-RO TSOs & PXs & NRAs • Observers: Polish TSO & PX & NRA Page 7 Project goals Main goals: • Extension of CZ-SK-HU MC to Romania • 4M countries wish to introduce benefits of market integration to market participants as soon as possible • Get prepared for joining European Price Coupling – implement MC based on PCR solution Context: • Stepwise market integration is the only way forward due to a blocked situation and slow progress in the CEE region – Flow-based capacity calculation methodology – Overlapping regions and other integration activities • CEE regional solution is not agreed yet • The extension does not hinder the regional development as it is an intermediate step towards European Price Coupling Page 8 OPERATIONAL- 4M MC topology CEPS SEPS MAVIR TEL mTMF TSO Joint System (mTMF+TSO Cloud) TSO Cloud OKTE HUPX OPCOM OTE EPEX EPEX EPEX 4M MC PCR Cloud Page 9 Power eXange technical solution • PCR implementation fully in line with the target model – 1 Full PCR Member (OTE) – 3 Serviced PXs (OKTE, HUPX, OPCOM) by EPEX Spot In operation OTE and EPEX Spot act as Coordinator in rotation. • PCR solution is an important step forward for further integration: – implemented interfaces can be reused with further extensions – coupling procedures compatible with MRC (except timing) – PCR IT solution same as in MRC • under implementation in CSE (IBWT Project) • already running in MRC Page 10 TSO technical solution • Equal status of all connected TSOs • The only TSO platform (no rotation, simple contract) • Allows easy changing of PX roles (Coordinator/NonCoordinator) via TSO Cloud interface system being a single point of contact on behalf of TSO systems towards PX side • Excellent experiences on performance and functionalities from CZ-SK-HU MC • mTMF and TSO Cloud systems are easily extendable – Unlimited number of TSOs and PXs – extension of the system with almost no costs Page 11 4M Market Coupling: Role model Capacity Calculation Pre-Coupling ATCs Exchange Bid Submission Market Coupling Calculation (PCR) Net Positions Market Clearing Prices Cross Border Flows = Allocated Capacity Clearing and Settlement Post-Coupling Publications Coupling Cross Border Shipment Cross Border Nominations Settlement of Cross Border Shipment Congestion Revenue Distribution (monthly) Page 12 Further Information on REGIONAL Market I. SERBIA TO JOIN THE COUPLED MARKET II. A FUTURE FLOW BASED MARKET COUPLED according with the new CACM guideline of the EU. The parties Romania-Bulgaria-Greece-Serbia-Croatia III. ROMANIA to join the CEE project Page 13 Thank you for the attention • • • Gheorghe Visan [email protected] Phone +40 751 107 729 20.10.2014 14